Sony to Eliminate 10,000 Jobs, 6% of Workforce, Nikkei Says

April 9 (Bloomberg) -- Sony Corp., the Japanese electronics
maker that has forecast a fourth straight annual loss, will
slash about 10,000 jobs, or 6 percent of its workforce, the
Nikkei newspaper reported on its website.

As many as 5,000 job cuts will come from reorganizing
businesses making chemicals and small-and medium-sized panels,
the Nikkei reported. George Boyd, a spokesman for the Tokyo-based company, declined to comment when contacted by phone.

Chief Executive Officer Kazuo Hirai, 51, who took the helm
this month from Howard Stringer, has vowed “painful” steps to
turn around Sony as consumers flock to devices from Samsung
Electronics Co. and Apple Inc. Standard & Poor’s and Moody’s
Investors Service have both downgraded Sony, which in February
more than doubled its annual loss forecast, blaming a stronger
yen, production cuts caused by last year’s floods in Thailand
and the cost of exiting a display-panel venture with Samsung.

“The job cuts are just a temporary fix for Sony,” Mitsuo
Shimizu, a Tokyo-based analyst at Cosmo Securities Co. said by
phone today. “This wouldn’t help address the company’s real
problems, like the slumping TV business.”

Sony rose 0.6 percent to 1,644 yen at the close in Tokyo
trading. The stock has gained 19 percent this year after
slumping 53 percent last year.

Management Plan

Japan’s largest consumer-electronics exporter had 168,200
employees as of March 31, 2011, according to data compiled by
Bloomberg.

“Shares are going up because of the Nikkei report,” said
Naoki Fujiwara, chief fund manager at Shinkin Asset Management
Co. “The market expects that it will contribute to improvement
of their business.”

The cost to insure the debt sold by Sony was unchanged at
185 basis points this morning, prices from BNP Paribas SA show.
The company’s credit-default swaps climbed 12 basis points this
year after increasing 123 in 2011, according to CME Group Inc.’s
CMA.

Hirai is scheduled to elaborate on his management plan
April 12 for the company that set the trend during the 1980s
with products such as the Walkman. Sony, worth $200 billion in
September 2000, is now valued at $20 billion, compared with $591
billion for Apple and $170 billion of Samsung.

The new CEO, who’s been credited with making the
PlayStation game business profitable, is bringing in a new team
and has put himself in charge of Sony’s TV business, which is
forecast to lose money for an eighth consecutive year.

In February, Sony predicted it would post a loss of 220
billion yen ($2.7 billion) in the year ended March 31. A fourth
consecutive annual loss would be a first for the company since
it listed in 1958.

Stringer Job Cuts

Hirai has already taken action on turning around the TV
business. Last year, Sony exited a panel-making venture with
Samsung. The sale of the stake in the venture to the South
Korean company will save about 50 billion yen in costs at Sony’s
TV operation.

Hirai took over from Stringer, 70, who is to become
chairman of the board after a shareholder meeting in June.
Stringer, who took over in June 2005, replaced division leaders
to spur cooperation and cut 30,000 jobs to revive earnings.

In 2005, Stringer announced the company will eliminate
10,000 jobs and shut 11 factories after predicting the company’s
first annual loss in more than a decade.

Stringer followed that in 2008, by announcing plans to
eliminate 16,000 jobs -- then the largest reduction announced by
a Japanese company since the credit crunch drove the world into
a recession.

Standard & Poor’s cut Sony’s credit rating one level in
February to BBB+, S&P’s third-lowest investment grade, because
of falling prices, waning demand and tougher competition. The
announcement followed downgrades by Moody’s and Fitch Ratings,
which cited difficulty in turning around the unprofitable TV
business.